If you have paid of your mortgage, you are in a great position to release equity. The mortgage is secured on your property but that doesn't mean you have to move out, so you are able to enjoy the equity released from your home for yourself family or friends.
Home Equity Release Mortgage plan features
Simply, you sell your house (at a reduced rate) and you get to live in it as long as you wish. the younger you are however the smaller the percentage of equity will be released as little as 20% for 60-65 year olds
Lenders
Be careful if you are in need of money you may find yourself tied into a bad deal, always seek professional advice
What is Equity?
If you are over 60 and maybe retired raising finances can be difficult especially if you are retired, the only real investment you have is your "bricks & mortar". This can be a viable way of raising fund for maybe a once in a lifetime holiday, a conservatory or maybe you just wish to help out some relatives, whatever your reason it is possible to release this equity from your home.
Home equity release plans
Interest only equity release mortgages with no monthly payments, no term, the interest rolls up until the loan is repaid.
Standard equity release mortgages with a term of say 30 years and interest payable monthly so the loan does not increase.
Advantages
- If interest rates go down borrowers are free to change their mortgages at a more competitve rate.
- Equity Release will provide a lump-sum or monthly payment of tax-free cash, index-linked, for the rest of your natural life.
- In the event of a downturn in the housing market there is no negative equity as the NNEG protects the borrower
- Equity Release will reduce the amount of inheritance tax paid by your estate.
Disadvantages
- If the value of the property does not grow at the same pace than the interest rate on the mortgage, then a Equity Release Plan may reduce the amount of money available for inheritance,
- If you are means tested, this income will affect any payments you are entitled to
- Equity Release may reduce the overall amount that you can give to charity.